Transcripts For CNBC Squawk Box 20141030

Forecasters predict the economy grew at a rate of 3. 1 . On the Economic Calendar today, weve got weakly jobless claims coming out. And well hear lots of names before the bell including conco philips, mastercard. The bulls looking to bounce back today. You can see this morning, there are some modest declines at this point. Dow futures down by about 6. 5 points below fair value. S p futures off by over 8 points and the nasdaq down by over 8 points. If youve been watching early trade in europe, you will see some biggest declines there, as well. And the major markets in asia ending mixed. The nikkei was up by just over 0. 6 . Hang seng down by 0. 5 . Shanghai higher about 0. 735 . While were talking markets, a number of stocks that are on the move this morning, visa posting better than expected results. Theyre saying mobile payments will be a great driver for the business. So theyre not worried about walmart and the other folks starting up their own. The Company Announced a 5 billion Share Buyback program. We should tell you about kraft foods reporting an 1 11 drop i prices. And in tech news, and i dont know if this is going to end up impacting the life of the alibabas in the future, but baidu falling short of estimates. The chinese Search Engine says it will continue to invest in its mobile business. Dreamworks posted a bigger than expected gain in profits led by how to drain your dragon 2. Have you trained your dragon . I actually have to the first time we go to break. And then its only 6 02 in the morning. I didnt bring it up. Youre the one reading it. I tell to talk to you about the New York Times. On the call, we should tell you dont you drink coffee every morning . I do. The ceo did not address rumors that the studio might be sold. Lots reported there. Then take2 interactive is rating its interaction forecast. Strong sales of grand theft auto. Down you think the moviemakers, that was a play on words . Train your dragon . Yeah. Probably, yeah. And were going to get to equities. Lets get back to the royalties. The New York Times is totally on board with this. And right here, a picture all about bumgardner. Youve got to bone think this was . This was a way to keep netanyahu off the front page of the New York Times. Its like what can we do . Its actually on page 8. My question is whether go ahead. I was having badminton lessons again and i didnt know. I can see they call him a court when the actual word we need to decide, because ive seen it in print and ive seen it not in print. Now, when we want to say the word, we talk about the dog, the shih tzu, right . Yes. They called a chicken shih tzu, basically. What do we do today . Do with use that word or do people know i think youve made it abuntdly clear. My favorite thing that has been left out of all this is its bad enough to do that, obviously. Israel is maybe one of our best allies. But in the piece it says the Obama Administration, out of all the world leaders, theyve been most frustrated with, its been netanya netanyahu. So not the guy in iran, mott the eye to ayatollah. Not putin. Its obamobama. Can we put this in context . The person that theyre the most frustrated with that theyre supposed to have good relations with. How about that . And because of pressure from us with a bleep so you could say the word but but the other thing they said is because of pressure from us, and because he was a court, he didnt attack iran and now its too late because theyve got the bomb. Almost happy that they were able to talk him out of it so that iran ended up with it. Do you understand what this is not my idea of a good october surprise for you guys. I thought it was supposed to be the other kind. I dont think this was this was not the idea of how to swing the election in their favor. What do you think you guys smp. The New York Times. The senator and i, were going to be all over you like white on rice. Were all going to that island together. Were getting along great. Becky mentioned equities now. Lets take a look at the broader markets this morning. Well take a look at oil after yesterday when the dollar was strengthening. Wti is just 81. 54. The tenyear, has it finally bottomed . Are we finally headed back to 3 . Some people think so. That was a big capitulation day. The dollar, a good time to if we dont end up on that island, lets go to lets go to an island in greece, maybe, or somewhere where there are hoteles and stuff. What do you think . If we dont end up on a deserted island. If its 1. 25 right now . I love san tu rini. Beautiful, white buildings and and we can stop on our way. We can go to all those places. Take a quick look at dpoeld. Gold is now 1205. And that makes sense, too, given that its finally over, this long, national nightmare, which some people would say. Qe infinity. For now. Its over for now. Right. But the arrow is still in the quiver if we need it. Forever, probably. Probably. Its a new way to deal with things. Zero, what else have you got . They had to go under zero. Some countries have tried that. Yes. Very briefly, the treasury yield, you were actually paying them to hold on to your money for you. Right. Stokes stutter stepped into the close after the fed snapped up its bond buying program. A handful of other key catalysts could look at First Quarter gdp. Joining us right now to weigh in on the markets is karen firestone. Also serat stefy. Welcome to both of you. Why dont we start off with the New York Times, the headline on this. Serat, the fed says it no longer needs to spend millions to bolster the economy. Is that the case . I think the data, pass theyve kept on talking, is going to show us exactly where theyre looking. Perils are going to get better. Commodities are coming down. I think the fed wanted to finally say we dont have to be here completely. Let fundamentals matter. Thats going to be the key for the next three to six pose. If we get earnings, get big, stronger, payroll, housing stronger, i think you can take and wean yourself off of that. Were pretty bullish. We think longer term the market are going to rides from here given that our economy is stronger than the rest of the world at this point. Karen, do you believe that the fed put it off . That at this point its make or break . I feel the fed clearly explained what they were going to do months ago about cutting this program back by the end of october. Now that theyve done it, now that were seeing earnings are coming and well over 50 of companies have reported earnings. Twothirds of them have been above expectation, an average of 4 above expectations. 9 higher earnings. And so weve seen that the market touched down 10 below its peak. It rallied off that level, back up 9 from that point up over 7 for the year. So i think that theres support. Buyers are coming into this market because this is a good market to own right now. And we think that will continue with Earnings Growth and labor improving. So do you think joe asked the question just a moment ago have we seen the bottom in terms of yields on the ten year . I think that we have, but i think that the increase will be slow. Weve been at incredibly low levels on the Interest Rate side. So an increase might be something to talk about. The next question, when will we move off zero Interest Rates . Were calling this a hawkish move. You get there by june or july of next year . I dont think so. I think you have to look at the difference between our rates and the rest of the world. If we move faster than the rest of the world, that would cause a huge amount of dislocation in the capital markets. Capital will flow here much faster. Were so coupled right now in terms of our companies in the united states, you know, working overseas, making money, and if you see Interest Rates moving higher here, commodity costs are going to get volatile. Do you think the fed considers that and says, wait a second, its not just that we have to worry about inflation. We now have to were about other economies and whether we mess things up by making the dollar stronger, messing up their economies and making this the i dont think they will formally say it, but i think in the back of their minds you have to look at it because if we destroy other economies or we put other global economies, talking about germany or japan, etcetera, thats going to have a big effect on the Global Markets. Companies then look at decisions globally. They dont just look at whats going to happen just in north america. I think slowly youll find you dont want that huge disparity wsh but if europe and occasion asia can get back to some normalcy, youll see rates moving faster than the rest of the world. How do you play this . For a long time, weve been talking, theres nowhere else to go, essentially. Theres no alternative except for the u. S. Stocks. Is that still the case or is this more complicated . Oh, i think its more complicated in that we experienced two weeks ago a period of panic. So the markets became very jittery and, in fact, we were talking about how far the market could be below zero two weeks ago or how quickly we would all get ebola. And, you know, the tone of the market can change so facht on the up side and on the down side. Its important you see stability and support to those earnings. Some of the names that you like . Constellation brands where theyre deleveraging, they made acquisitiones and theyre showing margin improvement. Beer and wine are strong growing categories for them. We like lewis allen hamilton. Its a contractor, but does i. T. Software for the government and the defense and security area. We like sealed air, which is pure of safety, which is important. And they showed a really Strong Quarter yesterday. Se where arat, karen just me some of those concerns. Those headlines arent going away. How do you try and factor any of those into your models or do you . You do, but there is more noise in the system. I think there are more opportunities when the market does pullback. Emotion is driving a lot of this market. You can see it. Its been two different markets. When things are good, everybody wants to come in. And the momentum stocks do really well. For us, we think given commodities have been coming down and consumers are coming book market, you want to be in the discretionary and the transport space at least for the next few months. Thats really where youre going to get top line growth. I want to thank you both for coming in today. Thank you very much. Lets see whats going on with apple. This is interesting. Its reportedly now in talks to sell its iphone in iran. Senior execs at the firm are said to have met with potential iranian distributors. It is not easy for a western company to move into iran because sanctions there are the biggest issues. The decision in my head has been made, but you know i dont like to make decisions. Waiting for the last day. In other global news, fighter jets interseptembering Russian Military aircraft. The russian aircraft are said to have conducted significant military maneuvers near nato and european air space in the last day or so. Last week, a russian spy plane violated nato air space for the First Time Since the end of the cold war. Weve intercepted them a hundred times or something in the last year or month, three times what it was in the previous period. So theres been a lot of testing. Exactly. Like would happen in top gun. Remember . Yes. Some of those migs went too far. Exactly. Coming up, Chris Christie has had it. You want to have the conversation later, im happy to have it, buddy. But until that time, sit down and shut up. Find out what got the new jersey governor so angry during the twoyear anniversary on sandy. And later, ted cruz will be our special guest in studio. More squawk box after this quick break. I sure hope so. With healthcare costs, who knows. Umm. Everyone has retirement questions. So ameriprise created the exclusive confident retirement approach. Now you and your ameripise advisor. Can get the real answers you need. Start building your confident retirement today. That is a live shot of san francisco. Some of the streets of san francisco. One of the bridges of san francisco. Right. Michael douglas. Welcome back to squawk box, everybody. New jersey governor Chris Christie holding a News Conference on the twoyear anniversary of hurricane sandy. A heckler interrupted his speech several times. Here is how the governor responded. Ill be more than happy to have a debate with you anytime you like, guy. Somebody like you doesnt know exactly what youre talking about except to show up and show off when the cam ares here. Ive been here when the cameras arent here. And done the work. If you want to have the conversation, im happy to have it, buddy. Billion until that time, sit down and shut up. This was a selfproclaimed gentler Chris Christie. Hes back. This is what we used to know him for. Hes been known in the past for taking people down who try to go after him on stage. Hes back. Do you know what the heck got him upset . Aid was slow. He kept interrupting. You know, when christie was 70 , 80 approval, that was a lot of that was based on youtube shots of the similar thing. I dont know whether it was calculated. I dont know whether hes now viewed differently because of what happened in the past year in terms of, you know, people tried to paint him as a bully. I dont know the thats taken post. But the people who were there cheered and took it positively. I take it positively. I just wonder how it plays on a grander scale. If youre talking about 2016 all of a sudden, and i dont know the answer to that. Right. I think the jury is out on it. 2016, its very interesting because of 2014. I dont know whether its the internet or time contraction or what. But every two years, we decide, god, the party that we have now, theyre the worst. We have to go to the other one. Two years later, really, its been every two years now. We hit 2008 and 2010, 2014. And then you wonder how the gop, if it does make gains on tuesday, you wonder how what that means for setting up 2016. And were talking about another thing well talk to ted cruz about. I want everyones opinion on this next story. Really . Yes. Mine, too . Your especially, joe. Okay. We need to start getting all these things you know, we have to come together on a lot of things. Just the two of us. We can debate this one for a very long time. I want to see what both of you have to say. The u. S. Equal Employment Opportunity commission is now suing honeywell. The Government Agency wants the company to keep imposing penalties on employees who refuse to undergo testing under a Corporate Wellness program. Employees could be personalized up to 4,000 each if they dont take part in a biometric testing program. How does everybody feel . Im good. If universal says everybody here has to take part what the private sector doesnt going after them. Youre okay if the government and yeah, im okay with the government going after them. No, i think honeywell should do that. Care programs with a good idea, but my own point is that versus the government deciding how to i think its an employer has more of a right to be concerned, especially if theyre involved with my health care. If theyre involved with id like to keep it that way where theyre you know, where the private sector i always talk about the job owned spy wear. What happened if Nbc Universal comcast says to you, you have to wear one of these all the time because we want to make sure youre doing exercise and if youre not doing exercise, we are going so charge you more for your insurance . Obviously, you would chafe at that. People talk about this being the future. That corporation res going to look into and youre leading the way. Im on board. I like it, anyway. But im not sharing this information at the moment with i think its an invasion of privacy. You would have to rank a priority. We all like individual freedom and personal sri come. I would let my employer dictate what makes sense for me to be able to keep my job quicker than id let the government. Its an invasion of personal privacy. You dont have to do it if you dont like, but were not going to pay it any mr. I dont want to make me eat broccoli sprout, but you have a right to have privacy. Again, i think these programs work if they are care programs, not maybe auyou get a discount. Solve the world problems. What would we do without the carrot stick metaphor . It could take forever what were trying to say. Its good shorthanded work and well come up with that solution for now. Thank you for that, we are all row boats just working for the man. No problem. Up next, a fresh read on what the consumer is doing. Kate rogers will be along with that story. Plus, tech in the toilet. This is not a report on struggling stocks. All was all about flushing br a look at yesterdays stocks. Tdd 18003452550 [ male announcer ] your love for trading never stops, tdd 18003452550 even on the go. Tdd 18003452550 open a schwab account, and you could earn tdd 18003452550 300 commissionfree online trades. Tdd 18003452550 so if you get a trade idea, schwab can help you take it on. 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Tdd 18003452550 tdd 18003452550 your goto for trading knowhow. receptionist Gunderman Group is growing. Getting in a groove. Growth is gratifying. Goal is to grow. Gotta get greater growth. I just talked to ups. They got expert advise, special discounts, new technologies. Like smart pick ups. Theyll only show up when you print a label and its automatic. We save time and money. Time . Money . Time and money. Awesome. Awesome awesome awesome awesome all awesome i love logistics. Hi michael looking good trying to keep up with you i told my producer karen that i take metamucil because it helps me feel fuller between meals. Its just one small change that can help lead to good things. Now shes breaking up with the vending machine. Nope. I call that the meta effect. [ female announcer ] 4in1 multihealth metamucil now clinically proven to help you feel less hungry between meals. And promotes heart health. Experience the meta effect with our new multiHealth Wellness line and see how one small change can lead to good things. Good morning. Welcome back to squawk box here on cnbc. Im joe kernen along with becky quick, Andrew Ross Sorkin and a bunch of other people. A whole group just showed up. Good morning, everybody. Where did we come from . Jimmys democrat outfit. Wow. Look at that blazer. Holy moly. Billy lee, guys. Come on. Hes on rm, man. Andrew understands the whole hes got the bracelet thing going today. The shirt with the tie, though, jimmy. Look, theres a woman in africa that makes these things out of jimmy williams, everybody. Ladies and gentlemen, ladies and gentlemen yeah. She got a line from a. I. D. Now she has a whole line of employees. Thats good foreign policy. Well be back to you people. Ive got everyone covered here. I cant talk about specific to anybody. Anyway, disturbing new findings, the shrimp lover says labels at the grocery, a group that a dnabased survey of shrimp. Of shrimp . You know shrimp are descended from worms . Did you know that . And found about 30 of the products bought were not what the label said. The bottom line they werent shrimp . I dont know. The bottom line, according to the Research Cheap imported farm raised shrimp is being sold at wild cot. But theyre all descended from worms. I dont know if my wife toll me that. She loved them before that. Its not nice good, im glad im not the first person that you tortured. Have you been around shrimp when theyre alive . Theyre cool. They do all kinds of things. Then you kill them and eat them if you have some spicy saw. Prices at the pump, theyre greek to me, falling as Consumer Confidence rising. Will that translate into bigger sales and profits for Small Business . Kate rogers is here with that story since i dont have a vehicle or ever go to a gas station. This is i do. And i do go to the gas station. Of course, they are cheaper and retail forecasts may be sunnier heading into the holiday season. But increasing Consumer Confidence and lower gas prices dont quite add up to better bottom lines for main street this year. The better average for gasoline, the National Retail federation says this isnt normal. Consumers will likely hang on to that cash rather than spend for Holiday Gifts this year. All eyes will be on Small Business saturday which is dedicated to shopping at local Small Businesses the saturday after thanksgiving. American express reports that last year sales were out about 5. 7 billion. Thats up 4 from the 5. 5 billion in 2012. Save works, also reports the average small private u. S. Retail company would see a 4. 5 increase in annual sales this year. Now, thats down from a. 5 in 2013. But its not all for Small Businesses, which have continued to move holiday sales to the giants of ecommerce like ebay and amazon. Analysts say lower gas prices may not mind hopping into their cars and driving to a local store rather than shopping online. And energy costs, of course, a always a big concern for small companies. According to the National Federation of Small Businesses, energy costs are among the top three expenses, with 38 saying operating vehicles is their biggest costs followed by heating and cooling and opera operating equipment. Now, lower bills mean more cash to move around and potentially reinvest back into the company. There you have it. I learned a lot. Were going to talk now, gearing up to be a political battle royal. The white house has been occupied by a bush or clinton for the last 20 out of 26 years. And its beginning to look like that streak might continue with Hillary Clinton and jeb bush is this weeks favorite to enter the race two years ahead of the race. And according to a new poll by converge yex, the current president has the lowest Approval Rating in the living memory with 17 of wall street approving of president obamas business. Includes what hey ma happen next week or not. Billy reed and joe watkins. Good morning, guys. Good morning. Lets talk about whats going to happen in two dwreers and then what happens two weeks from now. Are you going to 16 first . Im going to 16 first because i want to understand lets do it this way. Assuming the republicans win this coming week, how do you see that play or what has to go right or what could go wrong that would impact jeb bush if we think jeb bush is coming . The big challenge for republicans in a president ial election in 2016 is the Electoral College map met the big challenge for republicans going forward. Mean in terms of the midterm elections, we look great and were going to do really, really well. Not only will he we retain the house and improve on our numbers, we have a good chance to win the senate. We have a great chance to win senate. And then thats wonderful. The downside is that in a president ial election, if you look at the electoral map and you look at the areas of the country where republicans have just been shut out in recent cycles, its going to be very, very hard for us going forward, even with a great candidate like jeb bush. But jeb brush is a great candidate, probably the best candidate in the field so far. And do you think okay. What percent chance to you put on him stepping out . Hes going the make sure that its okay with his wife. Hell talk to some other advisers. But im banking on him to do it. I bank on him being a candidacy in 2016. If not him, who . If mitt romney wants to go again your not saying Chris Christie. I like what he said yesterday, does that help or hurt him . Nationally, it doesnt help him. I think what americans like about Chris Christie is that hes not a politician in the traditional sense of the word. Hes an honest guy. Not a bully inspect. But a very effective governor and somebody who has managed to win. Think about it, twice, and by even bigger margin necessary a blue state. Ill give you all that. He gets spanish, he gets africanamericans. At least he means what he says and thats huge. From that standpoint, if he emergeses as a National Candidate was the add men administration didnt care about this election on tuesday because their guy wasnt up for it or no one ever went broke underestimating the competent of this administration. The netanyahu thing, wouldnt that have been something that made the administration look good would have better fop for tuesday than that . The administration is the administration. Theres only two years left. The power of the presidency is the power of the presidency. He can get on the plane and go aall across the country and be the president. It will be effective if the senate and the republicans take it, which is pretty likely, i think. Its not a foregone conclusion, but its likely. Lets take the republicans have the how the house and the senate and send him all kinds of crazy wright wing bills. Thats going to happen. Fine, fantastic. The president has one option or two. A, he can sign these crazy bills. Hes not going to do that. Number two, hell veto those bills. Hell look president ial for the first time on the long time. But if were going to look at facts, lets look at faex as opposed to weve done that. But barack obama has done less executive orders than george w. Bush. And republicans win, theyre poor winners and as a result they set up im not sure theyre poor winners, but republicans, once they take the Playing Field and theyre on offense, they stumble all over themselves. So they have to wait until the democrats get the ball and explain one thing in the Democratic Party around hillary. There was a few that hillary has to ma maybe she is or thinks she has to tack even more left than she is. So sort of play clat the Elizabeth Warren progressive right. Do you think thats going to happen . Do you think that is happening . And if it does, does that make her more or less appealing . Hasnt she already done that on the issue of marriage ae quality . I would suggest the Hillary Clinton Hillary Clinton that was the its senator, her position probably showed more or less what they are today. And by the way, on the issue of choice, on the issue of marriage equality, on the issue of Voting Rights act account, shes in the majority. Mitt romney is not in the majority on that. Tet cruz is not in the majority on that. I hate to break the news to you guys how about businesses dont create jobs . I thought hillary was wall streets darling. Apparently not. How does she feel . I mean, i havent talked to hillary in such a long time. Do you need to talk to her on any given daytown how she feels. Wall street guys say she didnt really mean that. That is absurd. Of course businesses create jobs. The federal government doesnt create jobs. Arguably, wall street would be scared, for example, of an Elizabeth Warren, right . They should be quaking in their boots. I dont think anyone should be i think youre dead wrong on that. Shes not electable. I dont think shes running. Shes not, so its a moot appointment, anyway. But hes right. You guys have a big problem. Okay. But just the inevitable of one of hillary being a democratic candidate, hasnt anyone extrapolated some of these recent numbers about even women shifting, its millennials its flipflopped. If the republicans dont screw it up, there has been a youth messed this up in the last six years. Theres a chance 80s not a slam dunk. Part of the challenge for republicans becomes the fact whether women vote democrat or are trending republican. Women will take full advantage of the chance to elect the first woman president of the united states. In the same way africanamericans voted for the first avenue cap american president of the united states. My mother sitting in south carolina, shes conservative. Shes not in her seconds. She has virtually nothing in common with Hillary Clinton except for her gender. She wants Hillary Clinton to be president so bad it will kill her if shes not president. So in general, the overall population that now all of a sudden women describe the plurality now that even in Congress Republicans might do better in congress, over after the shutdown then you call these issues wedge issues. But i hate to break the news. Theyre not wedge issues. Theyre not social issues. The only time you bring them up is during elections. No. I bring them up all the time. If youve been to my website its like things are going along just fine. I dont think this is the case. I can thats exactly right. Federally, theyre both controlled. Theyre not weight, wait, wait, as men we probably should be quiet about the issue of womens reproductive rights since we dont have children. We dont have weird for about 25 seconds. Speak for yourself. Look, men should stop talking about womens bodies and leave them alone. And then republicans actually might give more women well, when women stop talking about my body, ill stop talking about theirs. We have to thank jimmy and joe. You dont need to thank me. Actually, you do need to thank me wrb but you dont. Do you want a bhu . Ive got all blue today. Look at you. Gentlemen, thank you very much. Thank you very much. You guys are good to go. You are. Kind of. About we come back today, much of the on the battles leading up to the texas midterm. As we head to a break, a quick on whats happening in european markets right now. Red arrows across the board. Germany sicking up those declines, up about 1. 25 . Sometimes, healthys not on the menu. Luckily, always keep my Meta Health Bars handy. My favorite bar, hands down. From the makers of metamucil, new multi health Meta Health Bars have natural psyllium fiber that helps promote heart health, with a taste that consumers prefer. Would you like one of these instead . Yummy thanks experience the meta effect, with our new multi Health Wellness line. And see how one small change can lead to good things. Welcome back to squawk box this morning. Take a look at futures at this hour. We have red arrows across the board. Nasdaq, 27 points dow, dow down 33 points and the s p 500 down 12 points. 13 points if were going to round it. Im not going to say this. Would you say it . Do you want me to read it . No. You still have young children. We use that word in our home regularly. Were going to talk the rollsroyce, the Mercedes Benz of toilets. The owner of the great hotel at st. Andrews. But nothing to set knit a powerful flush. The cutting edge of technology. Why this business is more than just a flush, next on squawk box. Ameriprise asked people a simple question in retirement, will you outlive your money . Uhhh. No, that cant happen. Thats the thing, you dont know how long it has to last. Everyone has retirement questions. So ameriprise created the exclusive. Confident retirement approach. Now you and your ameripise advisor can get the real answers you need. Well, knowing gives you confidence. Start building your confident retirement today. Theres confidence. Then theres trusting your vehicle maintenance to ford service confidence. Our expertise, technology, and high quality parts means your peace of mind. Its no wonder last year we sold over three million tires. And during the big tire event, get up to 140 in mailin rebates on four select tires. shouting location. Heres the location that matters the most. Here. Or here. Or here. Its wherever this is. To get customers to come here and stay here, youre going to need an app that connects to all your systems. So they can bank, shop, do what they need to do, and you gotta do it fast. Before the competition does. Its tough out here; you better be on the right cloud. Today theres a new way to work. And its made with ibm. Toilets are going high tech. Your bathroom features are now entering the 21st century. David koehler, ceo and president of one of americas largest companies. And there is and also, you have whats the name of the other division . The hospitality frup. At st. Andrews. Right. And in koehler, we have the American Club and whistling straights. Pga championship. Martin kymer won it last year. Oh, bunker gate. There thats right. Is this a low tech no, no, this is absolutely this is focused on clean innovation. I know your concerned about performance. Exactly. One of the things youre concerned about is these flappers, you know those flappers that allow your toilet to run all night. These have an aqua pitch in and it creates a seal so the toilet will never run on. So that wont happen. That water is fine that i stick my hand into, right . Yes. But theyve been designed to optimize performance. Using less water and a strong flush . These a all high efficiency toilets. This flushes on and this seat is called a pure fresh seat. It actually has a night light and a deodorizer. The market price is less than a hundred dollars. So christmas is coming. No warmer. Price is less tha 100. No warmer . This one doesnt, but well get to that. This is called the tresham. This is the cheapest one were looking at . This toilet will retail for about 800. Okay. Weve got three minutes so we have to okay. This is a wallhung toilet, a european design. Were seeing a trend in the united states. Its a clean, sleek design, wall hung. Oh, and a number one and a number two. Lightweight. 1. 6 gallons. And a 1. 8 gallons. Lightweight . You can. Lightweight and yeah. Okay. Black, very hot in in europe. This is brand new. Its a clean, sleek design. Put your hand over this. Touchless technology. Right there. Oh, wow. So its touchless technology. This is, of course, one of our what is this for . This is a Remote Control for the bidet seat. You can retrofit any toilet if you want to make it a touchless toilet. And this is top of the line. I dont know what this is. Put your hand over here. Its got notion sensing technology. When you approach it, it has a night light. In the night you can find it. Then put your hands over here, so if youre a male, put your foot there. You dont have to touch this. It automatically flushes. It also has music so you can play your mp3 player. I had no idea it would get this cool. Then when youre done it goes back down. If youre not a man, it will stay down. When you approach it, the lid will go up. So now tell me about you know, the Housing Market. I assume is this new homes . Models . Its interesting. When you look at the economy and post financial prices, the auto market has rebounded as you know. The Housing Market has been slow to recover. Why . The principle issue right now is Credit Availability people are having difficulty. If banks dont have a debt to income ratio of less than 43 , they really cant lend. So you have a number of people that would be qualified that simply cant get credit in this environment. Youre saying this is not as good as it should be for you guys. The Housing Market, its a key driver of the economy. It creates good jobs in manufacturing, construction. It needs to be there to help the economy really fire on all cylinders. All of the fed action and you still dont have it up to your liking. Youre seeing it grow, but its really being its struggling because of Credit Availability. And student debts an issue as well. How much does this cost . This will have a market price of about 5,000. Top of the line. So if you had more than one bathroom and you wanted those in every bathroom weve had a certain superstar order over ten of these for her home. Singer . Actor . Perhaps. Really . Okay. So its a hot product around the world. Im glad we got to do this. Keep us updated. Im glad you got on the antidoddfrank. We were talking toilets and you got to doddfrank somehow. Thank you. When we return, ted cruz is in the studio taking some time to talk to us with just a few days to go before the midterm battles. How he sees the make of a capitol hill over the next few years. More squawk box in a moment. Cme group can help you navigate risks and capture opportunities. We enable you to reach Global Markets and drive forward with broader possibilities. Cme group how the world advances. Big day . Ah, the usual. Moved some new cars. Hauled a bunch of steel. Kept the supermarket shelves stocked. Made sure everyone got their latest gadgets. Whats up for the next shift . Ah, nothing much. Just keeping the lights on. laugh nice. Doing the big things that move an economy. See you tomorrow, mac. See you tomorrow, sam. Just another day at norfolk southern. [coughing] dave, im sorry to interrupt. I gotta take a sick day tomorrow. Dads dont take sick days, dads take nyquil. The nighttime, sniffling, sneezing, coughing, aching, fever, best sleep with a cold, medicine. [coughing] hey amanda, sorry to bother you, but i gotta take a sick day. Moms dont take sick days, moms take dayquil. The non drowsy, coughing, aching, fever, sore throat, stuffy head, power through your day medicine. E financial noise financial noise financial noise financial noise welcome back to squawk box. First right here on cnbc first in business worldwide. Im Andrew Ross Sorkin with becky quick and joe kernen. Senator ted cruz will be joining us in studio in just a minute. But first a roundup of the mornings top stories. The focus back on the economy a day after the fed ended its quantitative easing program. Well get a look at 8 30 eastern time. At the same time the Labor Department will be out with its weekly report on jobless claims. Weve been watching the futures this morning. After some modest declined yesterday for the markets, red arrows are there once again. Down by about 40 points. Nasdaq down by 30 points and the s p futures off. In europe we have seen red arrows there. The dax in germany down by 1. 5 . The cac down 1 . Take a look where oil prices stand. Right now down by about 1 for wti. Decline to 8135. Meantime the 2016 race for the white house is looming in the background. Joining us now on set, were happy to have him. Senator ted cruz republican from texas. Senator, thank you. In hollywood theres an old expression. You never want to follow a kid on a variety show. I dont know how you top a toilet segment at this point. I would just have to say youre setting up having a member of congress on the show. Exactly. And youve got a use for the strong flushers in washington at times. Theres more than a little manure generated in that town. There is. You need big boots. Okay. So what is today . Thursday . So how do we count that. Four, five days until the election at this point. Heres something thats interesting to me. You can troo i to explain it to me. Weve got a stock market thats doubled. Weve got unemployment under 6 . Like it or not, theres more insured americans at this point. Things are there are some positive things going on. Why do 70 of the American Public i think part of that is unemployment has dropped primarily because more and more people keep dropping out of the labor market. I think the more measurable thing is labor participation. 92 million americans arent working. Number two, Median Incomes. Median incomes have stagnated, gone down. Theyre at the level of 1995 is where we are right now for Median Incomes. Weve seen 3. 7 million women enter poverty in the last six years. A lot of people are hurting and theyre hurting because, youre right. Here on wall street things are booming. But for working men and women, life has gotten harder and harder and harder. And what were doing under the obama economy isnt working. Thats why people are so dismayed. People can feel that its not its not as flush as the numbers would indicate right now. Look. Theres a lot of paper wealth. The stock market is going up. The fed has been goosing the economy. And that helps those who are invested in the market. But its not helping your working joe who is having a harder and harder time making ends meet. What is it so, lets say tuesday rolls around, do you see the wave do you see it building even more than the media is willing to admit right now . More than 52 or 53 . Some of these previous elections, it seemed out of reach for the gop. Some of those suddenly seem unreal. Whats your prediction for tuesday when its said and done . I am very optimistic. I believe republicans will retake the house and senate. What makes it hard to predict is six or seven of them are within a couple of points. If they all break right, we could win ten or eleven seats. If they all break wrong, i mean, theres still a chance the democrats hold on if every one of the close seats breaks the wrong way. And so at this point its all a turnout game. The last six weeks i have been on the road almost nonstop crisscrossing the country trying to turn voters out. If we turn conservatives out, then well have a big election day. Youre leading into something that i wanted to talk to you about. You probably saw this article. It was a bloomberg article about the isolation of ted cruz. Okay . And the president has not been to any states that are even the slightest bit red. Hes got to stay in the bluest of the blue states. This article pointed out you have visited georgia, you have visited kansas. These are deeply red states. But to certain parts of your party, you are youre what they would the progressives obviously think that thats the tea party is somehow a pajoritive to these people. Its in the conservative areas. Why is that . That was one of the sillier stories you see in the media. Sorry i brought that one up. But im going to get to something more positive about the whole idea. But go ahead. Look, what that story does is repeats washington conventional wisdom. What i can tell you is in the last six weeks, i have crisscrossed the country in addition to kansas and georgia. Ive been in colorado. Ive been in new hampshire. Ive been in iowa. This afternoon im flying to florida to do a rally with rick scott. The next day im flying to alaska to do a rally with dan sullivan. Weve done over 40 events. Weve also raised and or spent north of a Million Dollars for Senate Candidates helping turn voters out. Look, i recognize folks in washington and there are people in washington who push these stories, are not happy with anything that rattles the status quo. But i can tell you. People across this country are frustrated with washington, theyre frustrated with politicians in both parties in washington who arent listening to them. You read a lot of these things in the media but the one thing they say and use a religious metaphor. They say ted cruz, great at stomping out the heretics. But we need someone who can bring in the converts. And thats where its hard. You know, again, that is what they say in washington. Youre right. But at the same time ill tell you, we are seeing a tremendous number of independents showing up. I cannot tell you how many people on the stump come up and say im a democrat. But thank you for standing up and fighting for me. Thats something we hear over and over again. You know, in texas in 2012, mitt romney got 27 of the hispanic vote. Same election at the exact same time, i got 40 of the hispanic vote. Which meant in texas in 2012, one in eight hispanics went in to vote, voted with one hand for barack obama and the other hand for ted cruz. Can i interrupt quickly . I just want to tell you about some news out right now. Tim cook has an essay this was a personal, private essay he has posted on Bloomberg Business week at this moment. Talks about personal issues. He says for years hes wanted to maintain a basic level of privacy. He doesnt seek to draw attention to himself. But after thinking it through and really going to this, he says that he wants to let people know that he is gay. A lot of people know this inside apple. He says he doesnt consider himself an activist, but he realizes how much hes benefitted from the sacrifice of others. So if hearing the ceo of apple is gay can help bring comfort to anyone who feels alone or inspire people to insist on their equality, it is worth the tradeoff. This is a good segue. Because when i talk about the tea party, for some reason it has this connotation that its mired and socialist. To me i think its small government, its low taxes, its personal freedom, its earned success, its all these things that have nothing to do with the social issues. But for some reason, for example, we just heard this. The Republican Party has a heart. All of us have gay friends. In the last election, i heard individuals on the radio give a treatise on the individuals but said im gay. Is the Republican Party going to keep bedroom issues out of the election from here on out . Youre right that the tea partys focus is almost exclusively fiscal and economic. In fact tea stands for taxed enough already. Listen, there are great many social conservatives concerned about directions in this country. I think they have a legitimate part of this debate. But ill tell you what. With a threat that is bankrupting our kids and grand kids, is the out of control debt, is the size power and spending of the federal government and is the intrusions of the federal government on our constitutional liberties. And those are issues that bring people together across parties, across income lines, across racial lines, across ages. People want to protect our liberties. Although you have talked about antigay marriage legislation but at the same time you said what the Supreme Court did by not ruling on the state who is have allowed gay marriage, that that was tragic and indefensible. You are exactly right. Look, i believe in the constitution. I think we need to follow the constitution. What the Supreme Court did effectively striking down the laws of 30 states was wrong and it was judicial activism. But if a state allows people of the same sex to marry, shouldnt they be allowed to do that . We. No, no, i agree. And perhaps you are not understanding my position. Marriage is a question for the states. Marriage has been a question for the states since the beginning of this country. Whats your position if you were running a specific state though . Thats the issue. No, actually, andrew, with all respect its not the issue. The issue is constitutionally should the federal government or federal courts impose their policy views in the place of the policy views of citizens of states. Look, weve got 50 states. The citizens of new york decide they want gay marriage. They have the Constitutional Authority to make those decisions. And if the residents elsewhere want to make it between one man and one woman, they have that Constitutional Authority. Lewis brandis said we could have the laws reflect the values of the citizens of those states. Were going to take a quick break. I want to come back and talk about this. You want to know his actual feeling about who should be allowed to get married, is that where i want to know when you hear news ill do it before we go to commercial. When you hear news that tim cook is now announcing hes g a rkay. If he wanted to marry another man in your state, would you be comfortable for that . Its not a matter if im comfortable. The situation is if the citizens of california decide they want to allow gay marriage, thats a decision for them. Under our constitution, its not the job of unelected to impose their views. Let me make a final point thats kind of interesting. You guys asked why are you guys so focused, you conservatives so focused on social issues. I would note we were talking about the economy. And now the conversation is all shifted because the people focus on social issues. Because you need to get elected and the Opposing Side is going to use i was just arguing in the segment before you came on that the wedge issues in my view only come up every two years. The war on women. I only see that every everybody seems fine for a couple years then its up again. Theyre going to use it. And were trying the gop needs to figure out how to balance the social issues and the libertarian issues. Because libertarians you would think they want small government. They want the government out of peoples lives. Yet the social conservatives seem like thats the one area where they let government come into everyones lives. No. It is simply that government should reflect the values of citizens. And do it with the states. Im comfortable with your answer. Listen, i support marriage between one man and one woman. And i support the constitution letting each state decide its marriage laws consistent with the values of their citizens. One of the problems of the Big Government left is they want everything to be a one size fits all solution from washington. Take obamacare. Listen, a state has Constitutional Authority. If it wants to adopt socialized health care, a state can vote to do that. If people decide i want to live in a state with socialized health care, i can move there. They may not find job because of the impact on Small Businesses and job creation. But one of the big problems of the obama agenda is every solution comes from washington and is forced on all 50 states regardless of whether the citizens want it. And it doesnt let people vote with their feet. It doesnt let people have any choice. And i think we need to have a lot more choice and a lot more freedom. Can could you win in 2016 . If you were to decide to run. Because people you know what people say. And, you know, well, we cant run soandso. Weve got to run mccain. Theres no president mccain i knew of and theres no president romney. But were hearing the psalm thing. Jeb bush is the only person that could win. They said it about reagan too. That he was too conservative to be elected and he was elected twice. The analogy youre drawing is the only way we can win. The central question for 2016 is how can we win . The stakes have never been higher. Eight more years down this road, we risk doing irreparable damage to the greatest nation in the world. The only way for republicans to win, i believe, is to run a candidate who runs as a strong conservative with an optimistic view. Is jeb bush too far left to you . Jeb has not declared his candidacy. Im a fan of jeb bush. Im going to let him decide if hes running first. But i will say this. We need to learn from history. We need to look to history in what works and what doesnt. And one thing thats clear is if republicans run another candidate in the mold of a bob dole or a john mccain or a mitt romney, and let me be clear all three of those are good, honorable men. Theyre decent men. Theyre patriots. But if we run another candidate in the mold of a bob dole or john mccain or mitt romney, we will end up with the same result which is millions of people will stay home on election day which is what happened for all three of them. If we run another candidate like that, Hillary Clinton will be the next president. Whats the common flaw in those three candidates . What did they not have enough of . The common flaw, republicans win nationally when we draw a clear distinction. When as reagan put it we paint in bold colors, not pale pastels. When we move to the mushy middle and muddle the differences, what happens and this happens over and over and over again is millions of people stay home. I think where we are today bears uncanny similarities to the late 1970s. Might feel a little worse. I have joked the one person in america thrilled with the job that barack obama is doing is jimmy carter. And its i dont think we have enough time to do this much. Its a one term. On the economic side, were seeing the same failed policies, out of control spending, taxes, and regulation. The same misery, the same stagnation. Internationally were seeing the same feckless and naive foreign policy, the same hubris making the world. Russia and iran are openly laughing at and mocking the president of the united states. And i think 2016 is going to be an election very much like 1980. If you think about it, Ronald Reagan didnt run by saying, you know, im just like jimmy carter. Im just slightly to the right. Reagan drew a line in the sand. He said this race is a fundamental choice. He said president carter believes government is the answer to everything. I think its the problem. Early on people said how do you run against obamacare when you put in romneycare . And it was hard for him let me make a final point on this. You were asking about crossover voters. It is an interesting point in the last 50 years theres only one republican who has a group of democrats named after him. Reagan democrats. And you think about it, if the washington, d. C. Theory were right that the way to get crossovers is go to the mushy middle, then you would see bob dole democrats or mccain democrats or romney democrats. You dont see that because you have mushy middle is a good term. We dont want that. The more you say it, its like how did we ever okay. Lets say there are positive results for the gop on tuesday. Once again, the dog catches the bus its been chasing and now its got the bus. Do you have another 50 votes on repealing obamacare that he vetoes . Do you how does the gop snatch defeat again from the jaws of victory by, you know, for two years depending on swings back the other way. How do they prevent doing that . Thats the 64,000 question. I think its critical if and when we take a majority that republicans lead. The last time we had a majority we squandered it. We didnt accomplish a whole lot. Just a couple of weeks ago i wrote an oped in usa today laying out ten priority items. A positive agenda for 2015 with a republican majority. Its up on my website ted cruz. Org. We ought to focus on three big issues. Jobs, liberty, and security. Because those are the issues that people care about right now. And in my view we ought to tee up and vote on progrowth legislation after progrowth legislation after progrowth legislation. And let them you know, harry reid has preside ed over a do nothing senate. Folks in the media like to blame either republican obstructionism or the more even handed as they say both parties. But you know what . The facts dont back that up. The house of representatives has passed over 350 pieces of legislation. Many of them with bipartisan support. And every single one of them is sitting on harry reids desk. He will not allow a vote on any of them. Ill give an example. Keystone pipeline. It would have been authorized two years ago. I joined a bipartisan supermajority of senators in support of the keystone pipe line. Theres one reason and one reason only it hasnt been authorized. Harry reat wont allow a vote. One of the most egregious, enough to override an obama veto. Why hasnt that happened . Harry reid will not allow a vote. Iran sanctions. A bipartisan supermajority is on the record for stopping this historic mistake, this dangerous deal the Obama Administration is negotiating with iran. Again, why hasnt that happened in the senate . Harry reid wont allow a vote. I hope we see bold Republican Leadership that focuses on jobs and Economic Growth and opportunity. Because thats what the American People want. Great to have you in the studio. So many questions. Theres a lot still left. But, you know, a lot of times liberals think conservatives by definition theyre stupid because theyre conservatives. Princeton and harvard. Im you know dont look at me like ive heard you say the same thing about liberals. Usually i say princeton and harvard to liberals. I just want to get your view on it personally. Were going to kill another break. If youve got time. Sure. A lot of people are going to be talking all day today about tim cook coming out publicly and were a business network. What does that mean for business and what do you think just as a guy who hears him come out. Do you applaud that . What do you say . Those are his personal choices. I tell you, i love my iphone. My wife has joked that im a little bit like gollum with my precious, with my iphone. It is also, by the way, the worlds best child rearing tool. Our daughters who are 4 and 6 frankly operate the iphone better than heidi or i do. Theyll do anything to get a chance to play plants versus zombie on daddys iphone. Listen, tim cook makes his personal decisions. In terms of coming out and that is his life. My focus is on the constitutional question of who has the authority to make decisions. And this is something weve seen over and over again which is the federal government and federal courts deciding they dont trust the people. That they look down on the people. They dont trust us to make judgments about our lives so the federal government and federal courts are going to impose their own policy. One of the more amusing exchanges, there was a column a few weeks ago in the New York Times where david brooks who is not a fan of mine had a portion said two people, carl marx and ted cruz, think you can give power to the people. I have to admit i laughed out loud. You was like, wow, i dont think ive been lumped in with carl marx before. The article went on to be a pay in to rule by elites. So thats the connection. Saying we need more washington elites. I remember the column. And my reaction reading that was, wow. You know what . The elites sure have screwed things up. Five and a half years ago the National Debt was 10 trillion. Now its nearly 18 trillion. We are seeing i read that column and thought you know what . I agree with mr. Brooks. We need to give power to the people and the biggest divide we have got in this country, i dont think its between republicans and democrats. The biggest divide weve got in this country is between career politicians in washington in both parties and the American People. And part of why youre see sog much unrest but part of why youre seeing so many people get engaged and get involved is the people are trying to hold washington accountable. Are trying to say listen to our priorities. My top priority from day one has been restoring Economic Growth and jobs and opportunity. Thats the top priority of texans. Ive got a responsibility to fight for 26 million texans. In the two years ive been in the senate, with harry reid and the democrats we spend practically zero time talking about tax reform, about anything that would produce jobs and Economic Growth. And no wonder congress is at 10 Approval Rating if we dont even talk about the priorities of the people. You know, senator, we have talked a lot this morning about qe, the end of quantitative easing, the Federal Reserve what its done to this point. I know you werent a fan of janet yellen. You opposed her nomination. What do you think about the feds move at this point and where do you think we go from here . Well, well see how the markets react today. The last times theyve tried to ease back, the markets have been pretty jittery on that. Listen, qe1, qe2, qeinfinity has been an unprecedented experiment with expanding the money supply. Now, we have been benefitted to some extent by a reduced velocity of money. That perhaps has kept inflation in check. But i got to tell you, actually, for the average working american, inflation is a very real concern daytoday. If youre a teacher, if youre a steel worker, youve seen the price of eggs go up. Youve seen the price of milk go up. Youve seen the price of chicken and hamburgers go up. Youve seen the price of gasoline go up from 1. 83 when obama was elected up to 4. Its still over 50 higher than it was five and a half years ago. Youve seen your Health Insurance premiums skyrocket under obamacare. Youve seen your energy bills skyrocket under the epas regulations coming in. And youve seen Median Incomes stagnate. Ive got to tell you, if youre a single mom waiting tables and youve seen as womens have seen their Median Income go down, its not much comfort saying a basket of goods says inflation is under control. You know in your life the things youre writing checks for, those prices keep going up and your paycheck isnt going up to match it. Thats why people are saying bring back jobs and growth. Bring back the vibrancy of the senator, would you come back . We enjoy having you here. Squawk box will be right back. Cute little guy, huh . This guy could take down your entire company. Stay with me. On thursday a hamster video goes online. On friday it goes viral a network choking phenomenon. Why do you care . Hes on the same cloud as your business. The more hits he gets, the slower your business may get. Do you want to share your cloud with a hamster . Today theres a new way to work. And its made with ibm. Welcome back to squawk box, everyone. Among this mornings top stories, apple ceo tim cook pinning an oped today saying publicly for the first time he is gay. He writes in part, i dont consider myself an activist but i realize how much ive benefitted from the sacrifices of others. So if hearing that the ceo of apple is gay can help bring those struggling to come to terms with who he or she is then its worth the tradeoff to my own privacy. This is something that may change the conversation to actually have a ceo say this publicly. Often ceos dont want to get into the front of this. He says hes a private person and he wants the focus to be on apple and apple products. There are very few fortune 500 ceos and maybe none. I remember jim stewart wrote a piece a month or two ago saying there were so few. This is when lord brown had his book come out. There was a discussion that there probably was and is a community of ceos and Board Members and other who is are gay who have been unwilling to come out over the years. And this may change that. Personally you have to admire and respect the thought process thats gone through this. The idea that this is something he has struggled with about whether or not he wants to disclose it. Because he says hes a very private person. I can understand that entirely. This isnt something he has to do, but it may help others along the way. You have to admire him for that. One of the reasons i wanted to ask the senator what he thought was just because i say bravo. I think its great because i think it should change the conversation. And i hope if there are people who have felt uncomfortable about saying something or coming out or being more open or whatever that they now feel more comfortable. If thats what this does, thats my view of the moment. Joining us now on the line is jon fortt. Good morning. Good morning, becky. This is something thats been talked about in circles in the past. Its been questioned. He himself has said hes never hidden it from people hes close to. But does this change the conversation . It absolutely does change the conversation. I mean, i think this is just a really big moment in corporate history. As you guys were discussing. Very seldom if ever have we seen a ceo of any five company write a letter like this about his Sexual Orientation. And for it to come from apple, the most valuable company in the world, the most valuable brand in the world by many measures is really significant. At the same time, though, this is going to surprise pretty much exactly no one who knows tim cook or works with him. It would be wrong to even probably call it an open secret. Its just sort of known in technology circles and around silicon valley. But the impact of him talking about it openly, him talking about his thought process in pointing to the conditions in society that make this an issue that he wants to plant a flag on, really interesting, really significant. And of course i think weve got to acknowledge that there are some people who will question what the impact on apple is going to be. And certainly weve seen that when companies have policies that some people for whatever reason disagree with disney being one theres always a light shined on that. But tim cook thinks being open is big in history. We had peter thiel on. We asked him how do you view im gay but i dont know all the answers to all these things. I think tim cook felt the same way. So im gay but what does it have to do with me running apple . But i think he finally got to the point where it would be helpful to the entire discourse in the country for people to know about him. The essay, if you read it closely and take a look at it, it kind of takes you through his thought process on this. Points out that every morning hes greeted by a photo of dr. Martin luther king in his office. He says i believe deeply in the words of Martin Luther king who said lifes most persistent question is what are you doing for others. I challenge myself with that question. And i realize my desire for personal privacy has held me back from doing more important. Becky . Yeah. Something else to point out is tim cook has stepped out and made the case for diversity, acknowledgment of uniqueness. Being important in business. He has elevated a couple of black women in the executive team. Lisa jackson is reporting to him for environmental affairs. Former head of the epa and the head of Human Resources over all of apple also a black woman. He released apples diversity statistics along with a number of other technology companies. But he didnt just release them. He talked about why its important to have in an era of Global Business to have broad representation of lots of different viewpoints in an organization. So its also relevant from a standpoint and he mentions this in his essay. Embracie ining diversity. And thats Something Else the people should be talking about figuring out their own perspectives on. All right, jon. Thank you very much. We will have more on this at the top of the hour. Again, apple ceo tim cook penning an essay hes gay for the first time. Were going to switch to taking a more hawkish tone indicating that maybe more aggressive with rate hikes. Steve leisman now joins us with more. A little surprise yesterday. The fed ending the third round of bond purchases, aka qe. Which is a hawkish view on the outlook for rates. Here are the changes. The fed said it is gradually diminishing. In september they said they remained significant under utilization. I guess we couldnt get that full screen up. But thats what they said. There it is. Pauss, three wob two, one. And moving on. Yellen had based the policy on the concept there remains to be tens of millions of americans under and unemployed. Heres what she said at the september press conference. There still is and the statement says it significant underutilization of labor resources and a very modest pace of wage increases thats picked up very little. I see as essentially a reflection of that. There have been some not zra drastic improvement, but yellens own metric the growth rate of wages down in september compared to august. Now, the outlook for the feds futures raising by nine basis points. But at just 53, the markets still discounting a highly dovish fed. Now, the fed tamed considerable time from the end of qe to the beginning of rate hikes. But the market has to think now a heightened risk of an earlier rate hike than the summer of 2015. And as steve just explained markets getting what they were expecting. The muted response sending lower. What lies ahead in this postqe environment . Joining us now is bruce cassman and steve wood. Tell us what is going to happen now. I think the market is going to take this in stride. This is the least well kept secret in monetary policy. In historical context, this is still an accommodative fed. We saw yellen in april of this year. Everything that could have slack has slack. This is a global phenomenon. The emergency measures have ended and theyre going to begin the process of normalizing. I think were at the beginning end of i think a tightening edge. Bruce, when do you think . June of next year is when we think they will give us the first rate hike which is earlier than the market is forecasting. I think one market that didnt really overlook this was the currency market. If you look at what happened to the euro yesterday, over markets round tripped as it took it in stride. There wasnt a huge reaction or a reaction that it came right back. I think it gets to this issue of policies here. Bhavr else the policy is doing, it is going to be tightening over some period of time. And the expectation is out there that the European Central bank will be ill call it eqe. Whats your call when this all goes down . I still think its june 2015. But i have to think i have to hear what other people say. I really want i really had wanted yellen to make a speech between the meetings that she didnt use that boston time period to say go from significant slack to slack gradually diminishing. Its a big step. Right . In language there were a lot of different places going on. European, what is qe . European qe. Eqe. You like that . Been working on that. You could go qee. Within a couple of months qee. We still think its going to be qe3 of 2015. But its symbolic. I think the market dependency is going to be pronounced. Hes that swing vote on the fed and they really are looking at how the data come in. And no desire to be what i called dr. 1937. She doesnt want to make the mistakes of the 1930s and overly tightened too soon. Give us one data point youre going to watch were not paying attention to. Were looking at the currency markets. Weve seen some movement there. But i think equities right now are going to be in the high Single Digits for the rest of the year. And the u. S. Economy probably continues in that 3 . First weve got to go, 15 seconds. But do you have a word for outright of bonds. I think they do more to make it more attractive at the next meeting and a trillion on top of where they stand right now. When . Over the next nine months. Were going to leave it there. Steve, bruce, and steve. Thank you. Coming up Harman International cranking up. Out with quarterly results. Well have the ceo on the show when we come back. Today could be the day. The day we give you hope. Relief. A cure. Today, we believe every life deserves worldclass care. As one of the top four hospitals in the nation, over 100,000 people from around the world come to Cleveland Clinic for care each year. And were ready for you with a Second Opinion or a sameday appointment today today today and everyday. Call today, for an appointment today. No question about that. But your erectile dysfunction that could be a question of blood flow. 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Ask your doctor about cialis for daily use and a free 30tablet trial. Theres confidence. Then theres trusting your vehicle maintenance to ford service confidence. Our expertise, technology, and high quality parts means your peace of mind. Its no wonder last year we sold over three million tires. And during the big tire event, get up to 140 in mailin rebates on four select tires. Welcome back, everybody. Harman international reporting. Joining us is the ceo. Thank you for being here. Thank you. How is business doing . Business is pretty good, actually. Were enjoying pretty nice growth. Not just the economy is doing reasonably well but the u. S. In the far east. Were seeing a connected car driving the improvement which means more and more cars are opting for onboard entertainment which means flexible platforms so they can impractical with apps out in the market place. Also the audio business has done well. You cant have connected car unless you have good connected audio in the car. And outside of automotive we have done extremely well. Expanding our scope in innovation. Danesh, on the car frent right now, we keep waiting to see when apple is really going to make a move into the car or whether google and android will make a move into the car. Where are they and where are you relative to them . I think both have done a lot of good things for the auto industry. In terms of creating a need for lots of flexibility and bringing the lifestyle in the car which we are so used to. Until recently we are expected to sort of leave it behind so to a point where regulatory saying we should turn off the phones. Thats not going to be possible. Technology is here. Where google is driving in terms of an Autonomous Car working closely with google and apple for a long time. And basically we are acting as a bridge between ale con valley who has the technology but not so much deep expertise in car ecosystem. And supply for german Car Companies and deep expertise for 30plus year. So its going very well. I think its all real in five, seven years. But most importantly for i love to drive. I would like a Safety Environment where i can interact my lifestyle. How much do you worry about the distracted driving phenomenon . I saw theres a new microsoft device or rather a toyota car thats using a microsoft device that has cameras on the eyes of the driver and if you fall asleep, it looks at you and takes control of the wheel. Is that the future . You know, unless you integrate lots of these gizmos safely and securely, you are causing a lot of distraction. And this is where we have a Cutting Edge Research going on. Also in germany and the united states. You talk about cameras. Thats basically coming. But your Steering Wheel would have sensors which will detect the tiredness of your retina. Based on that it will give a visible and automobile alarm or where it will act to sker the car. But a lot of testing has to be done. A car is where the life is. You can have a device and upgrades sent to you. The difference between these two worlds. Dinesh, we know theres this battle thats taking place between everybody who wants to get in and control the front of the car. Whether its apple. We heard from at t. We heard about all these device and mobile Companies Interested getting in there and getting control. I know a lot of the auto makers have been working with them. But theres only so much. Do they work with you or through you or are you a competitor . Right now we are serving nine of the largest fifteen Car Companies. When you talk about where do they fit in, ecosystem is getting complex. Bringing a lot of these Points Solutions from google and apple. Google is only one. Apple is one. More Search Engines than google worldwide. Alibaba, and samsung. Car companies are designing cars that are agnostic to all these. So youre agnostic too . We are agnostic. Our systems are designed to embrace all kind of handheld Smart Devices whether made by microsoft or google. I dont want to scare the heck out of the audience. Maybe you can tell us not to be scared, what do you think about hacking . The idea that not only are our devices susceptible to hacking but that a car, a moving vehicle could one day be susceptible to hacking and what that means. You know, cars are most vulnerable right now. Because none of these cars, the Software Systems which we put in 20 million lines of code but theyre not designed to be connected to the internet. So the next Generation System which we are working on which will go out into bmws and gms of the world, this will have Safety Security layer just like in our banking and Network Systems and our Office Enterprise systems. Once you have that, you will have firewalls. Nobody should be worried about that. The companies are responsible. Therefore the Smart Devices will be given to bring in the play list and contracts and what have you. But Mission Critical functions will be protected with the internet up. Okay. Dinesh, quick question. I know youre friends with jim cramer. He just had the ceo of this new company pono, neil young, he was on talking about that. What he claims is a Higher Quality audio system. He wants to know if youd adopt that. Absolutely. Neil is a friend of the company. Not just neil. Many of them are so upset because with digitization with the mobility which we all love, i love my music to be portable. But we have paid a price. Loses 90 of what neil young recorded. So we have launched technology to solve the problem. We call it clarify to restore the sound quality. And thats just being launched in the many car farms. Its coming into handsets and devices and also streaming services. Neil is saying lets also design devices that can play back High Definition music. So we are very aligned. What neil is doing is supporting our cause which weve been talking about for years. Dinesh, thank you for joining us today. Thank you so much. Good to be on your show. Coming up, when we return well talk more about tim cook saying hes proud to be gay. How this could change board rooms around the world. And also up next, the king is back in cleveland. Lebron james, his debut tonight. His effect being felt on and off the court. Well head to cleveland for a live report. Back in moment. Ok, if youre up there, i could use some help. Smart sarah. Seeking guidance. Just like with your investments. That sets you apart. It does . It does. Youre type e. And seeking another perspective is what type e s do. Oh, and your next handhold. Is there. You dont have to go it alone. E trade gives you the support and guidance to make informed decisions. Are you type e . Tonight lebron james is back in cleveland and Morgan Brennan is there and joining us with more on the lebron effect. Hey, andrew. Well, its all about king james here in cleveland where the cavaliers are playing their first game of the season against Carmelo Anthonys New York Knicks tonight here at the q behind me. This is a huge homecoming for the fourtime mvp and the effects that are being felt both on and off the court. Tickets on the secondary market are absolutely soaring right now. The current average price for a cavs home game, 388. Thats a 224 increase over last year according to tikiq. Its about the most expensive nba team. Tonights game is the highest price for a single event this season. Fanatics. Com says the cavs are the top selling nba team in terms of merchandise. Up 700 versus last year. The top selling jersey, you guessed it. Lebron james. And local restaurants and hotels are getting more reservations. Cuyahoga county suggests this will add to the local economy. We collect more tax money. Theres an emissions tax, payroll tax because additional people are being hired. So that creates jobs not just at the q itself, but also creates jobs in bars and restaurants and hotels because their numbers go up. So some of it directly were getting money. Of course all of this is going to depend on whether james and his teammates can win games. Of course that starts tonight. Guys, back to you. All right, great. That is great news for cleveland. And our buddy dan gilbert. Coming up, first read. And tim cooks announcement that he is gay. receptionist Gunderman Group. Gunderman group is growing. Getting in a groove. Growth is gratifying. Goal is to grow. Gotta get greater growth. I just talked to ups. They got expert advise, special discounts, new technologies. Like smart pick ups. Theyll only show up when you print a label and its automatic. We save time and money. Time . Money . Time and money. Awesome. Awesome awesome awesome awesome all awesome i love logistics. Twith available forwardd collision warningigned. And new blind spot monitor and a 2014 top safety pick plus rating. Cost of entry . A fortune. Until now. Hey sarah, new jetta . Yup. Can i check it out . Maybe at halftime . Introducing lots of new. The new Volkswagen Jetta. Isnt it time for german engineering . Sometimes they just drop in. Always obvious. Cme group can help you navigate risks and capture opportunities. We enable you to reach Global Markets and drive forward with broader possibilities. Cme group how the world advances. Welcome back to squawk box right here on cnbc, first in business worldwide. Im Andrew Ross Sorkin. Among our top stories this morning, tim cook saying publicly for the first time he is gay. The apple ceo writing an essay in Bloomberg Business week about this today. Were going to have former congressman barney frank joining us to discuss what this means for the future of corporate america. The focus is back on the economy a day after the fed ended its quantitative easing program. We are just half an hour away from two economic reports. The economists are looking for an annual growth rate of 3. 1 . Well also get jobless claims. Both coming at 8 30 eastern time. This morning the futures have been under a little bit of pressure. Dow down 34 points. S p futures down 12 points. And the nasdaq down by 29 points. As we mentioned our our first read on Third Quarter Economic Growth is just ahead. Some economists have cut their forecast recently. But growth should come in around 3 . Joining us now director of health and Economic Policy studies and also former romney policy adviser. And senior fellow at the center for American Progress and professor of Public Policy at the university of massachusetts boston. And well get to gdp, but first christian, youre mad at the fed ill bet. You wanted them to declare qeinfinity until, what . 2300 . Isnt that where you were on that issue . Im glad youre putting words in my mouth. No, im fine with it ending. They should not have ended it, though, right . No. I think this was foreseeable and easy. I think the rates that keep Interest Rates low, theyre going to stay low for a considerable time is the right way to go. I think the fed needs some room to breathe. It has created the flexibility and i think were in the good spot with policy at this point. I think to some degree we want to stay where we are in Interest Rates. The question is also on the regulatory side, what can the fed do to make sure the creditory practices are pushed out. Wow. So but you would not if you were not janet yellen you wouldnt have kept qe going . You would have. I know you would have. Wouldnt you . No, no. I think at this point kevin. It was foreseeable. We can say its foreseeable. But you knew they were going to do it. Youre not saying youre happy they ended it. Well, i think the part here is also, like, qe has had its run. It has helped to do what it meant to do. Stabilize the economy and help create jobs, bring the job market to a better place. But the other part is also were pinning too many hopes on qe. Also too many hopes on low Interest Rates for the coming months and years. I think as janet yellen has said and i agree with that one, definitely is the fiscal policy side has to step up and hope that after the elections are over, were going to see more action from congress. Oh, we will. Only to be vetoed. But kevin, why are they slashing gd why are people bringing down numbers and yet the fed seems to at least have to say theyre upgrading the view of the economy as they ended it yesterday . The fed language was pretty good. Just now that interexchange with christian looked like you were asking a Senate Candidate if they voted for president obama. I know. Wasnt it good . It was great. And christian knew it. I liked how he kept saying it was foreseeable. I saw it coming. He knows it. And im not even in washington. He resembles that remark. Deep down a German Central Banker, you have to remember that about christian. As you remember when i got crushed on jobs day because i saw the data slowing and gave the lowest and most ridiculously wrong number, the fact is that the world is slowing. Chinas not looking so good. Europe is probably headed into recession. And thats really going to be bad for net exports in the u. S. There are a few glimpses that arent with what we expected. But the u. S. Economy is cruising the rest of the world. And when that happens, it takes a bite out of u. S. Growth. So my guess is you can still come in above it. But im worried were not going to be able to post the threes and fours because of the slowing in the rest of the world. I agree with kevin. But i would add that what we see in the expert side is slowing overseas, that comes in with a lag. Some of the shorter term benefits like lower oil prices, lower prices at the pump and lower Interest Rates, those are the positive effects that could happen. Look at durables and retail and just the you know, i know consumers felt a little bit better, but it doesnt feel good, does it . And look at the selection. It feels pretty good. Why is there a 70 wrong track with the marketed new highs and unemployment . Im not sure i would be interested to know where kevin sees the Positive Side on the general feeling because there are clearly markers. Were going to get a shot in the arm from the last. You look at the saving rate and poll numbers. Jobs and the economy, jobs and economy shouldnt rank as high as they do. And sort of clearly there are Things Holding back. The job growth is great. And thats the best not great, but theyd be good. I also worship at the alter of mark sandy. I think there are some signs that the economy is actually getting close to overheating. With that as a backdrop today seems like a layup. Youre well, i dont know how you see an economy overheating if the jobs numbers are a little over 200,000 jobs per month and wage growth so far because hes got four and a half percent growth. But the ecb has been off in many ways. Kevin, do you worship at the altar of the stimulus he designed for the union buyouts . No. I never trust hum on policy. Just on what the numbers are doing. I never trust him on policy. Thats good advice. Okay. All right, gentlemen. Christian, youre not mad today. I guess youre that elections coming up and you just kind of resigned to some bad news down the road, huh . No. I think this its a very difficult numbers to push out. There are things that are definitely bad for many people overall though there are good signs. Im happy theyre keeping Interest Rates low for a considerable amount of time. Im happy were talking about inequality seriously. Im hoping congress will actually act on the minimal wage, for instance. I believe theres enormous pressure for congress to do something in that regard. Theres a number of things im happy about. Im not happy that were still bumbling around with job growth. I need to know whether kevin was really onto something. Do you battle your inner demons about being a German Central Bank we are all of your progrowth lean sngs. Ive been in the u. S. Long enough. You were the republic of cambridge, i forgot. Im in boston. Are you . It seeps across the charles. Thank you. Kevins a very for being an aei guy, hes very nice. Why . Because hes not sucking up right now . Youre implying that everybody else there isnt . No, i think theyre more set in their libertarian viewpoints. Okay. We do have some more news for you on the apple front. Apple chairman art levinson responding. Saying tim has our wholehearted support and admiration in makes this personal statement. On behalf of the board and our entire company we are incredibly proud to have tim leading apple. In the last hour we talked to senator ted cruz on his thoughts on gay marriage legislation. Yeah . I thought we were playing a sound bite there. I dont know. When we come back, well talk to barney frank. Well get his reaction of the announcement and how it could change the landscape of corporate america. Plus Chris Christie has strong words for a heckler yesterday in new jersey. That is just ahead. Squawk box will be right back. And the freedom of the open road . A card that gave you that im 16 and just got my first car feeling. Presenting the buypower card from capital one. Redeem earnings toward part or even all of a new chevrolet, buick, gmc or cadillac with no limits. So every time you use it, youre not just shopping for goods. Youre shopping for something great. Learn more at buypowercard. Com today could be the day. The day we give you hope. Relief. A cure. Today, we believe every life deserves worldclass care. As one of the top four hospitals in the nation, over 100,000 people from around the world come to Cleveland Clinic for care each year. And were ready for you with a Second Opinion or a sameday appointment today today today and everyday. Call today, for an appointment today. Now to the big buzz story of the morning. Tim cook publicly saying for the first time hes gay last hour. We talked to ted cruz on the topic of gay marriage legislation. I support marriage between one man and one woman. And i support the constitution letting each state decide its marriage laws consistent with the laws of their citizens. In the state of california if the citizens decide they want to allow gay marriage, thats a decision for them. Joins us now to talk about this barney frank. Now a cnbc contributor. Thank you for joining us. I was looking over an old James Stewart piece. There are only two other publicly traded companies of ceos who have come out. Put this in perspective of tim cooks coming out today. Its extremely important. The major reason weve made progress in providing equality for people who had gay and lesbian and transgender is that 60 years ago many people didnt know any gay people. And there was a prejudice that said we were immoral, weak, whatever. There was a terrible stereotype. The only antidote to that is reality. It has been the process of millions of americans telling their friends, their relatives, their patients, et cetera who we are. That were gay. And now of course thats been very important on a personal level. But when someone as well known as tim cook and more importantly when the man who has been the leader for several years with Great Success of one of the most important and successful businesses in america says by the way, you know those people about whom you had these negative feels, im one of them. That does such an enormous amount to diminish the negative feelings that i am very grateful to them for doing it. Barney, how is this going to shift the landscape in terms of the conversation within the Business Community . As i mentioned earlier, very few others have come out publicly before. Are we going to see more people coming out . I said mazel tov to this. Its particularly the case were talking about business. And people are going to put the bottom line first. When a month from now apples stock price continues to be very impressive and has not suffered any loss as we know, thats going to be one more obstacle removed from people coming out. Im sure there are boards that have told some boards well, you know, we dont want controversy. Tum cooke just destroyed that. One of the most important, successful, Innovative Companies in American History is presided over and has been for some time by a ceo. At first was surprised that he had come out. But i think they deserve it was a wise decision not to do it on the first day. But to have been there for several years. So that people could not perform a kind of prejudice judgment. And now its indisputable. That his can Sexual Orientation is important to him personally. And who he chooses to engage on a personal level. But its a wholly different factor economically. I do believe that will encourage some other people to do that. Its kind of hard for someone to say, well, we dont want you to come out because it will have a negative impact. When the head of apple has done it. How could anybody argue anything is bad about it . Apple, young people, theyre not going to have any problems about sales at the margin. Even if a company would worry about a 1 decline pick another company that might not be apple. But i dont think even conservative Type Companies with that sort of aura around them, i dont think they worry anymore. In fact, id worry more about sales going down for a chickfila or Something Like that. Id worry more if you were outspoken against marriage equality. Theres no question. And to the extent it has any impact, it would be marginally helpful. Im not a great expert in this kind of hardware, et cetera. Theres no question. Given the large number of gay and lesbian people, our feelings about the need to continue to get rid of whats left of discrimination, if any of this will help, i guarantee you from people yrn they are deciding whether to buy an apple product or competing product. They would say i want to support tim cook. Do you own an iphone . No. I do not own an iphone. I take it back. I do now. I just got an ipad. Look, i was in congress for 32 years. One of the great bargains the American People get are the extraordinarily able, dedicated people of integrity who work for us on the staff. So for years after i became chairman i had 50 or 60 people working for me so i didnt have to learn it. And im not good with things. Ive been in a lifelong battle with inanimate objects. I push the wrong buttons and do it too hard. But i did just get an ipad. So i can read emails. So i do have one. What about people that still in their for whatever reason, they think that marriage should be between a man and a woman. Should there be a litmus we were talking to ted cruz. Should there be a litmus question on whether they can reach a Higher Office if they have the wrong viewpoint on gay marriage . Peter thiel, hes a libertarian, hes gay and out and he supports ted cruz. Which i think raises the ire of a lot of other gay people that hes able to give money to someone who is seen as being seen as against gay marriage. Im just wondering, i dont know how many people are left that are against gay marriage. But should they be disqualified at this point . No. I would say this about mr. Thiel. The argument that you help someone, you help gay rights by voting for ted cruz is wrong. But it may well be that youre worried we will do too much about Climate Change or you think we should be skuting Social Security or medicare. I can understand people who have issues. Particularly since you make so much of it. I do want to say this. No, i wouldnt disqualify someone who is antimarriage. Someone whos very antigay or antiblack or antisemitic. You dont want them in there. Can i make a point of whats the most significant politically . Ted cruz is one of the most conservative people in american politics. He just made a very important statement that you quoted. That you ran on the air. Which he said if a state wants to have samesex marriage, thats okay. That is an advance over the conservative position of just ten years ago. Of massachusetts declared marriage george bush a more mainstream republican asked congress to pass a constitutional amendment to prevent the states from doing what ted cruz now says states should be able to do. That is push constitutional amendments which were voted on twice in the house. Would not have allowed a state to do that. Would have said that anywhere in america samesex marriage is illegal. So even ted cruzs position, he has he represents an evolution in favor of allowing samesex marriage. Like the president and others that have moved from a more nuanced they moved directly, but its even more of an indication that the country is moving if someone on the right takes that position. Barney frank, thank you for jumping on tv at such lastminute notice. We appreciate your perspective and insight on this. I will have to make an admission. I was glad to respond quickly. Fortunately the camera stays up. Im not wearing socks. Oh, boy. Wow. Theres the morning visual. Andrew does that a lot. Coming up, Chris Christie usually its when youre rushing. Yeah. Chris christie with some strong words for a heckler. Then its the morning that markets are anxiously awaiting for. Thats a first read on Third Quarter gdp. Have things slowed or are we on track . Well have that number and Market Reaction and much more. trader vo i search. I research. I dig. And dig some more. Because, for me, the challenge of the search. Is almost as exciting as the thrill of the find. announcer at scottrade, we share your passion for trading. Thats why we rebuilt scottrade elite from the ground up including a proprietary momentum indicator that makes researching sectors and Industries Even easier. Because at scottrade, our passion is to power yours. But parallel parking isnt one you do a lof them. Ings great. Youre either too far from the curb. Or too close to other cars. Its just a matter of time until you rip some guys bumper off. So, here are your choices take the bus. Or get Liberty Mutual insurance. For drivers with accident forgiveness, Liberty Mutual wont raise your rates due to your first accident. See Car Insurance in a whole new light. Call Liberty Mutual insurance. E financial noise financial noise financial noise financial noise u. Welcome back to squawk box. Governor Chris Christie holding a press conference on Superstorm Sandy anniversary. Heres how the governor responded to a heckler. Ill be more than happy to have a debate with you, guy. Somebody like you who doesnt know a damn thing about what youre talking about except when the cameras here are. Ive been here when the cameras arent here and done the work. You want the conversation later, im happy to have it, buddy. Until that time, sit down and shut up. And everythings viewed through the prism of how you feel. I love it and love him. Everybodys going to have a different viewpoint of what it was. I love seeing that. Hes not a politician. He doesnt care. Sure i would have liked to have said the same thing to the guy. I didnt even like the way the guy looked like from behind. I dont know how it plays broadly. I dont either. Saying sit down and shut up. Just for me. Andrew i liked it. I mean, theres something authentic about it. Good. Were agreeing on more and more things. The only thing you worry about is whether that authenticity is too much in other contexts. There are other progressives like the Huffington Post must hate it. But i love it. Were getting closer and closer on a lot of issues. When we come back, we do have a report of the morning, gdp. Getting in a groove. Growth is gratifying. Goal is to grow. Gotta get greater growth. I just talked to ups. They got expert advise, special discounts, new technologies. Like smart pick ups. Theyll only show up when you print a label and its automatic. We save time and money. Time . Money . Time and money. Awesome. Awesome awesome awesome awesome all awesome i love logistics. Theres a difference when you trade with fidelity. One you wont find anywhere else. Onesecond trade execution. Guaranteed. Did you see it . In one second, he made a trade, we looked for the best price, and the trade went through. Do the other guys guarantee that . Didnt think so. Open an account and find more of the expertise you need to be a better investor. We are back and awaiting jobless claims and the first read on the Third Quarter gdp. Lets get down to Rick Santelli with this number. A surprisingly strong number for our first look. Up 3. 5 on quarter over quarter change on our first look at Third Quarter gdp. Consumption, 1. 8. Thats definitely a lot lighter than our last look at 2. 5. Its close. Price index 1. 3. A lot smaller than last times 2. 1. Jobless claims, they moved up a whopping 3,000 from a slightly revised 284 to now what stands at 287,000. And of course continuing claims, they moved up a swich from 2. 35 to 2. 34 million. On gdp, youre looking up 4. 2. Thats good compared to our last point. And if you look at pce prices, 1. 2 versus 2. 3. What do we see in summation . Jobless claims still under 3,000. Gdp on our first blush isnt bad. If you take into account the neg fif First Quarter its starting to average out to a better pace. And the markets, the markets like it a bit. You can tell yields moved up to 231 to 230. Well continue to monitor. And the equities, theyre not a wrong way again. Today the information improved and the net change went from about minus 50 to minus 37 on dow futures. Thank you very much. Lets get more reaction to these numbers. Joining us is chief economist at stern and jim yuri. Its a good number. But not good in the way it was expected. Rick is right. Consumer spending is down from the prior quarter, but its a bit higher than had been expected at 1. 8. I saw a print of 1. 3. Not as big of a decline as expected. And a little disappointing on the investment side. I heard a lot of guys talking about a lot of double digit. Instead i see fixed investment. Just 1 overall with structures. Its hard to read this table. Five and a half. Equipment up just 7. 2 versus 11. 2. A lot looking for a double digit which isnt didnt happen one of the reasons was a better number for government. Looking for a decline in government spending. Still a hefty increase here. As to when defense spending. In terms of the cap x side. Lindsey, whats that tell us . This was during a period where you saw a lot of concerns, a lot of tumbles in the stock market. I think by con sujs missing that expectation, we did expect a pullback from the Second Quarter but maybe not as large of a pullback. What this says is the u. S. Consumer is still under a significant amount of pressure. I know weve talked about this many times, but against the backdrop of lackluster job growth. The consumer did better this time. A little better. Sounds like business is more or likely to get spooked by these head lans than consumers. I think were looking more in the range of 2 to maintain that 2 consumption range. Again when we look at this relative to the Second Quarter, we did see the consumer fall back into less than ideal territory. And looking at retail sales, it does suggest that momentum is continuing to wane as we move into the key Fourth Quarter Holiday Spending season. One other thing worth noting. Inventory is always a big swing factor. How much is on the shelves out there. It was a negative points. Took away 0. 6 from gdp after adding 1. 5. You had a big inventory draw down. Build back up in the Second Quarter, came back down many the third. All right. This is the first big economic number weve seen since the fed making its announcement to end qe. How does the market handle it . There was a five to ten second span where everyone was looking at themselves is good news good news or good news bad news. The reality is good news is probably good news. I think its lazy thinking to look at the way the market traded yesterday and lower this morning and think the market is spooked a little bit by the fed. The real explanation of that is probably we rallied 170 off the bottom. The path of least resistance. We have to remember we look at data from this week. The only number that was good is the Consumer Confidence number from two days ago. I think that has to be brought into equation this week. I think thats right. One of the big outlooks here for the Third Quarter and Fourth Quarter is the consumer ramps up to a 3 range from where we are right now. So if were going get to three, we have to get there with some consumption. I dont think cap x can drive it the way its been driving it. You had a positive contribution from that here. Its going to be the consumer. And the big question is how that gas price decline plays out. Weve had a bunch of people on this week. Its been a big debate. Some people saying the consumer just isnt confident enough to spend that gas win fall thats out there. Others say you put a dollar in the American Consumers pocket, theyre going to spend 98. 9 . I dont think they have a choice. Arguably september could have been weaker but we saw them take a extra hundred dollars and bought an iphone. Sop weve already seen that price reprieve at the pump translate into the retail sales numbers. Guys weve got to remember weve got to remember the environment thats being created here. Nobodys going to save anything. They dont have a choice. Theyve got bills too. If theyre going to save it, where are they going to save it . You might as well buy iphones. If you put that money back in the pockets by lower oil, it is a net economic positive. You can say the strong dollar is going to hurt the exporters, but so what. Consumers spending money, thats going to be dollar for dollar in my opinion. Not 99 cents. Anyone . So lindsey, you have some concerns about it overall. You think they make it to 3 in this current quarter. Fourth quarter gdp is going to be predicated on how the consumer fares. Unless we start to see very rapid high wage job creation, theres nowhere for the consumer to go but down. Energy price reprieve, certainly. But not a longterm. Do you think the fed was wrong ending qe . I dont. I think there was a word it was no longer providing a positive benefit to the economy but instead maybe a barrier burden at the time it does become appropriate to policy firm. And i think it was right to move away. Along the consumer here, i think were going to get half of what lindsey said. Job creation but not high wage job creation. I think whats happened is theres down pressure on it. That means the employers have an ability to choose. And make and its not a very competitive market out there when it comes to employees. Except for the most talented folks out there. I think you get the windfall from gas prices, more job creation. Weve been doing 250 a month. So either way, people are still more people are still working. Thats more money. Even though its not necessarily higher wages. I think the Fourth Quarter is shaping up. I think the question is going to be, you covered retail. I remember back in those days at the wall street journal. If youre a retailer right now youve probably got orders into china. Did you order a lot for the Fourth Quarter or a little. So one creates strong pricing at the retail shop. The other creates a lot of discounts. Profits versus total sales too. As we know inventories are high right now. Retailers are already forced to discount a lot of the inventory theyre sitting on from the Second Quarter carrying down into the Fourth Quarter. So that, too is going to keep new demand or new sales in check. Theres only eight weekends to go. One more thing. At 3. 5 were 1 of the economy. These are numbers the fed would consider to soak up slack in the economy and would bring people back into the workforce. Thats the theory anyway. One of the things practice in theory. Tend to conflict at times. Thanks for being here. Did you read page six . No. Why . Roger got an award. Did you see his line . No. Behind every successful man theres a surprised wife. Thats a great line. When we return, what tim cooks landmark announcement today means for corporate america. As we head to a break, take a look at futures. See how things are setting themselves up for the day. Not so well at the moment. Nz dak off 25 points an the s p 500 opening down about 10 points. Were back in a moment. Then theres trusting your vehicle maintenance to ford service confidence. Our expertise, technology, and high quality parts means your peace of mind. Its no wonder last year we sold over three million tires. And during the big tire event, get up to 140 in mailin rebates on four select tires. 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Tigers, both of you. Tigers . Dont be modest. I see how youve been investing. Setting long term goals. Diversifying. Dip you got our attention. We did . Of course. Youre type e well, i have been researching retirement strategies. Well thats what type e s do. Welcome home. Taking control of your retirement . E trade gives you the tools and resources to get it right. Are you type e . Usually its behind every successful man theres a successful woman. But i heard his line before. Yes, i have heard it before. Its not a new line. But its a wonderful line. Im glad roger used the line. Im sure my wife loves the line. Thats where i was going with this. Welcome back to squawk box. And ive had some personal experience with it. Avon earnings beat the street by six cents. Citing a successful turnaround. Weight watchers go from make y up to weight, this is my stocks to watch today. Revenues topping consensus. Shares under pressure as membership declined again. Conoco phillips. Beating the street on top and bottom lines. A new customers also improve results. The story weve been talking about all morning, the ceo of one of the worlds biggest and best known companies saying publicly for the first time hes gay. Tim cook making the announcement and explaining it in an essay. Joining us now Senior Editor at recode. Good morning. So was this a surprise to you he would make the announcement . Just a matter of timing. Its pretty clear that tim has been sort of setting the stage for this discussion for some time. Apple has taken a very strong line in cases like when arizona passed a rather discriminatory law in its legislature against gay people. Apple spoke up. Tim has been very vowal about lbgt rights. He made a speech in new york to auburn alumni. Hes an auburn grad and football fan. He talked about equality and growing up in the south and seeing cross burnings on the lawns of neighbors in his community. And it troubled him. This is something equality and social justice are things he feels very strongly about. He feels a sense of responsibility. Thats what i get from reading the essay this morning. He feels a sense of responsibility in his role as a leadership of apple, one of the Worlds Largest cocountries to distribute his voice. Whats your sense of the rest of the valley in terms of if this changes things and whether other people will be more open. It probably will. You know, the funny thing is that this has been something that hes never been secretive about it, hes just never publicly identified himself as gay. Theres a lot of people who have known this. Its not like he hasnt told anybody on his board or anybody in his company. Its just hes been an extremely private person. Theres a lot of private people in silicon valley. I think this will change the discussion just a little. But when you spend time in silicon valley, its almost beside the point. Arik, people now arent going to say me too. People are private. For tim its different because its the most valuable company in the world. It can be a its a great statement. But anybody else is entitled to their privacy. And its irrelevant really. It has nothing to do with him being ceo of the company. But he can do some good because of the discussion were having. I wouldnt imagine all of a sudden everyone rushes to do it. Theres some people that i think like the New York Times guy jim stewart did it. And theres a little bit of it wasnt anger but it was like, wow, a lot of these guys dont seem to be willing to do it. And its disappointing that they arent. And so i almost thought, you know, tim probably was thinking maybe i should do this because it looks like ive never hid it so im not trying to hide it. Because i think there was a little bit of what would you call jim stewarts attitude on it . He was a little bit disappointed . He clearly wanted more gay executives to be public about it because he felt that there was a sort of undercurrent of not wanting to talk about it. I think the number one feeling i go back to it. I think barney frank in your previous segment on this referred to it well. Its a sense of responsibility. Im going to read from it now. The world has changed much since i was a kid. America is moving towards marriage equality. Public figures have bravely come out. But theres still these laws on the books with discrimination. You know, you cant employers can fire people for being gay. Landlords can convict people for being gay in certain places. The battle is not really won until everybody is treated equally under the law. And so it feels like a sense of responsibility. He feels like he has benefitted by those who have come before in this discussion. Okay. Before we let you go, i have a question thats completely a business question. Unrelated to any social issues this morning. Its an apple question. Theres a report out that apple has thought about trying to sell its iphones in iran. And we were trying to make sense of that earlier today, how that would work relative to the sanctions that currently exist. And figured what better person to ask than you. You know, i read that story. It was very interesting. If the funny thing is when you go to iran you see a lot of iphones. You see a lot of things that technically shouldnt be there because of the sanctions. So, you know, if and when the rules change, and i think theres been some discussion about maybe loosening sales of Communications Devices officially. So there might be some loosening of the rules. It would absolutely make sense for apple to want to reach out to somebody who they might want to do business with in the future. For an official Distribution Channel within apple. Theyre getting in one way or the other. There it is. Okay. Arik, thank you for joining us. You bet. When we come bab, jim cramers take on the fed, the gdp number, and the giants winning the world series. And later we head to the site of the International Boat show where everyone that floats is on display. See whats new before you head to your dealer. As we head to break, look at some of the names making waves in the marine and fishing industry. Squawk box will be right back. Opportunities arent always obvious. Sometimes they just drop in. Cme group can help you navigate risks and capture opportunities. We enable you to reach Global Markets and drive forward with broader possibilities. Cme group how the world advances. Dovisit tripadvisor new york. This is the life. With millions of reviews, tripadvisor makes any destination better. Painstakingly engineered without compromise. To be more powerful. And, miraculously, unleash 46 mpg highway. An extravagance reserved for the privileged few. Until now. Hey josh new jetta . Yeah. Introducing lots of new. The new Volkswagen Jetta tdi clean diesel. Isnt it time for german engineering . Lets get down to the New York Stock Exchange where jim cramer joins us now. You know, i guess everybody wants to talk about apple and tim cook because its apple. Have you heard the line behind every great man theres a surprised wife . Thats a good one, right . Behind every great man instead of a strong woman, there is a surprised wife. Andrew says thats the oldest joke. Have you heard that before . No. Thats new to me. Thank you. The king of wit across from me. Screen play. He knows the lingo. We are not writing screen plays. We are coming to work every day. Showtime never picked up one of my pilots. Hbo repeatedly turned down by entreaties. I know. Apple probably the if there is one company talked about more than any other company, apple. Tim cook, the ceo is gay. That is significant. I dont have anything more to say than what joe said. You had great guests all morning. All of them talked about the discrimination. Im listening to the discrimination thinking that stuff really still goes on. Obviously, it does. Maybe because i live where i live, im not as cognizant. I thought it was great. I agree. We were just talking because weve all known and we remember our own network had a little bit of an issue with jim stewart. I remember gentlemen james was on. He is one of my closest friends. I had dinner with him tuesday night. Wow, why are more people he did do the xbp line. That was terrific. Gdp is pretty good. Sort of being polyanna about things. Maybe they are right. Thanks, jim. Thank you. When we come back this morning, we are going to float down to ft. Lauderdale for a look at the Worlds Largest boat show. Hop onboard some of the most expensive yachts and who is buying these things. There was n she was the one. She reminds you every day. But your erectile dysfunctionthat could be a question of blood flow. 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If you see folks leaving the office early today, maybe taking their private jets south, there is a good chance they could be headed to ft. Lauderdale for the International Boat show, the largest boat show in the world. Thats where we find nbcs kerry sanders. Standing live on a vessel. Looks like a big one. It is. Im on board the emolina. Asking price 29. 7 million, but for yachts in this category, because demand is outstripping supply, brokers say theres less room than there once was for negotiations. 86yearold gomez is in the market for a new family yacht. 2. 4 million u. S. Reporter here from brazil with his translator in tow, the bargaining begins. Reasonable. Sold six yachts. Prior to even beginning the boat show. Reporter which tells you what . The economy is definitely picking up. Reporter show organizers estimate the value of the 1,500 boats here at 4 billion, the highest end ships top at around 70 million each. At the very top end things are very healthy. Reporter depending on your age, the organizers voice may sound familiar. Things are stronger in the u. S. Reporter he sounds like his father. This is show business . It is. Reporter those polished railingses may see fewer international buyers, but just as americans are beginning to spend again. But the super wealthy . They feel good now its okay to show their wealth again. The smaller boat is still 500,000, sometimes 1 million. You may gasp. Reporter with diesel running around 4. 30 a gallon, it costs about 43,000 to fill up one of these babies. I think that was like andrews lunch money, isnt it . Maybe a little bit more than that. Very nice. There are probably 100 kerry sanders. Of course hes related to efram zimbalist. Youre showing her age. I do every day. Youre right. Were done. Join us tomorrow. What a show. Squawk on the street is coming up right now. Good morning. Welcome to squawk on the street. Im david faber alongside jim cramer. Carl has the day off. We are looking for a lower open. I think that is fair to say. Of course, yesterday we got the end, the end of bond buying, that is. What did it do to the tenyear yield . It sent it up a bit. More reaction in the fiveyear, even the two. Theres the ten. You can see we are still under